An interesting thing has started to happen all over the United States of America. Lawyers are showing up at district courts to foreclose on people who John Bird & John Fortune parody as ‘the coloured man in a string vest sitting on his crumbling porch’ and the judges are finding for the defendant on the grounds that the lawyer has failed to prove clear title to the loan.
The entire edifice upon which the process of securitisation is built turns out to be a quagmire. One academic study showed that less than one foreclosure in six had a clean audit trail. It is like the game of Chinese Whispers. What started out as a signed mortgage document between a real person and a judicial person enforceable by the courts has become, many transfers later, a dubious claim that lacks legal validity. Finance Capitalism it seems is starting to devour its own tail and may end up being the biggest victim of all.
But it will seek to take everybody and everything we value down with it. Where to begin? Elizabeth Browning wrote: ‘How do I love you? Let me count the ways.’[i] We began this chapter with a similar thought. In less than a minute we had listed a dozen victims. Here are our Top Ten categories of victim: bank victims; legal victims; bankruptcies; suicide; economic warfare; the environment; government budgets; health; education; pensions. But each category contains thousands upon thousands of individual tragedies. Anecdotes explain more than statistics.
Our archive site publishes the full article about the bankruptcy of the 4th Lord Sudeley written by, the 7th Lord Sudeley. That story was the reason why I started to organise meetings at the House of Lords with him that became the Forum for Stable Currencies. Feeling sorry for impoverished aristocrats would normally have no part in the concerns of ordinary people. But in much the same way as Charles Dickens laid bare the innermost workings of the Courts of Chancery in his novel Bleak House, so Lord Sudeley, in tracing his particular family story, has uncovered fundamental flaws in almost every aspect of modern finance. For several of them he proposes remedies that deserve serious study by Parliament.
He also established that surprisingly little has changed since Lloyds Bank filed the petition for bankruptcy against the 4th Lord Sudeley in 1890, although there are changes on the way[ii]. The last parliament made fundamental changes to the law governing bankruptcy to bring real people more in line with the generous bankruptcy provisions for judicial persons. And there is a proposal in the Queen’s Speech for the next session of Parliament to bring in an American-style Chapter II that might have done much to alleviate the situation that the Fourth Lord found himself in. Nonetheless the family history of the Sudeleys is instructive at many levels. It represents not just a key aspect of the financial history of this country but also the steady decline of the House of Lords.[iii]
However none of these measures approach the root of the problem which is the contractual nature of the money used by ordinary people. The little individual makes a fundamental distinction between stuff that belongs to them which they quite rightly think of as personal possessions that they may dispose of at their own discretion, and everything else. There was a time when this sense of ownership could encompass the family and the local community. It belongs to my family. It belongs to the village. But a thousand years of usury has had its effect. One commons after another has been enclosed and vested in individual ownership.
There have been two processes: the privatising of public goods and the theft of personal possessions, and the essentially unrelated process of disintegrating the whole, extended families into single households; rounded lives into specialised functions (housewife, consumer, car driver, soldier, car owner, job holder etc.). But ideas of common wealth and family and village communism have not disappeared. They sit deep in the hearts of men and women. The notions are not dead, merely sleeping. They will awake.
In this regard money represents the freedom associated with personal possessions. Coinage is issued with no strings attached. It may come in metallic form, as paper notes or in digital form. But its principal characteristic is that it is transferable and it is personal. It is fundamentally different to every other form of money because these come with strings attached and contractual obligations of one sort or another. Ordinary people have no trouble spotting the difference. Coinage, and this is the basis of my definition, is free for the owner to do with what he or she will at the point of use. It comes without any conditions attached. Some have argued that this is wrong.
Silvio Gesell developed the idea of a biodegradable coinage which came with an obligation to spend it in buying local goods and services. The obligation was enforced by the coinage losing one twelfth of its purchasing power each month until it was worth nothing. The idea was to encourage the holder to spend instead of hoarding. It was thought that since goods decay, money should too. This idea has yet to catch on. But the side effects are often the main effects so perhaps there are unexpected benefits that make it worth more than the cursory glance it has received so far from Parliament.
There was a time when considerable thought was given to the theology and the philosophy of money. But with the occasional exception[iv] the subject only rises to the top of the political agenda in times of financial crisis. In between the knowledge is lost as the old professors die off and new ones schooled in new money mythologies take their place.
Meanwhile the victims of our dishonest money system proliferate while we are told that justice and equity upon which the ancient Doctrine of Usurye was grounded has no place in commercial life. Greed is good. The idea that ‘It’s not personal, it’s business’ is a very modern idea that has rarely been found acceptable to the greatest minds of not just this age, but of any age.
The grandmother of the 7th Lord Sudely is a direct descendent of Thomas Wilson, the author of A Discourse Upon Usurye. In 1569 Wilson wrote:
‘Usury overthrows trade, decays merchandise, undoes tillage, destroys craftsmen, defaces chivalries, beats down nobility, brings dearth and famine, and causes destruction and confusion.’
Henry Swabey is his History of Usury and the English Church regarded this discourse as a pivotal point in St. George’s thousand year war against the dragon of usury. In 1923 the economic historian R. H. Tawney wrote ten essays on the Sixteenth Century as an introduction to a new edition of Wilson’s Discourse. Swabey quotes Aristophanes that ‘Usury is that swelling monster contrary to nature, order and all good reason’ and cites Tacitus who wrote of the cancer of usury as ‘an old venomous sore and the chiefest head and cause of rebellions in countries.’ Statesmen throughout the world and throughout the ages have condemned the practice of usury, not only on moral grounds, but because of its consequences on society. We are all victims.
[i] Elizabeth Barrett Browning (1806-1861): How do I love thee? Let me count the ways.
‘I love thee to the depth and breadth and height.
My soul can reach, when feeling out of sight.
For the ends of Being and ideal Grace.
I love thee to the level of everyday’s
Most quiet need, by sun and candle-light.
I love thee freely, as men strive for Right;
I love thee purely, as they turn from Praise.
I love thee with a passion put to use
In my old griefs, and with my childhood’s faith.
I love thee with a love I seemed to lose
With my lost saints, —
I love thee with the breath,
Smiles, tears, of all my life! — and, if God choose,
I shall but love thee better after death.
[ii] One hundred years later, the same bank used the same methods to bankrupt Heritage plc – following the same principles on ten levels. Thanks to his MP Dr. Rudi Vis, Chairman Jeff Lampert at least got an amendment to insolvency laws. Other victims have been bankrupted by banks, Customs and Excise or even solicitors.
[iii] I consider it complete abuse of public power rather than service in the public interest what happened first to his great-great grandfather and later to his grandmother: Lloyds bankrupting a distinguished aristocrat and politician and lawyers acting in their own rather than the interest of heirs.
[iv] The Philosophy of Money by Georg Simmel was first published in German in 1901. Twenty years later it was published in Russian and ten years after that in French. It was sixty years before there was an English edition.